i'm going to include one last chart here, since we discussed the bank runs in greece and spain last week; the adjacent widely republished chart originated with a financial times article "The anatomy of the eurozone bank run" - what we see here, in this graph of imbalances on the ECB’s balance sheet, is the picture of a significant number of bank accounts being moved from spanish, italian, greek, irish and portuguese banks, with most ending up in german banks; this isnt because they believe their banks are about to fail; rather it's the threat of their country leaving the euro and having their funds redenominated in their own devalued currency (ie, lira, drachma) that is causing the flight; note that there was considerable flight from ireland (pink) as early as 2009; but when the irish economy later stabilized, most of those funds returned...

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

Wednesday, May 23, 2012

[The Fuck-It Point]: When you have had enough. When you decide to take matter into your own hands and don’t care what’s going to happen to you. When you know that from now on you will resist with whatever tactic you think is most effective.

A film about the dark side of civilization, why we should bring it down and why most civilized people don’t.

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

after last week's unemployment report showed the massive increase in the numbers of those considered "not in the labor force" - over half a million - and the record lowest labor force participation rate in over 3 decades, a number of economists & analysts went beyond the normal one line writeoff of those who dont count in an attempt to discover the makeup of that large part of the population who had somehow been slipping through the cracks...those who've tried to play down the severity of the unemployment situation have usually dismissed the non-partcipants as mostly due to increases in newly retired baby boomers and young people going back to school, so a number of bloggers attempted to deconstruct the figures to see who it was that made up that record 88,419,000 of us who were either non-participants due to their own choice, or who had dropped out of the labor force due to market conditions...were going to look at a few of those, and a few graphs from them, and see if we can put together a cohesive picture of what's going on...we'll start with a few graphs from a post by bill mcbride at calculated risk, who himself was responding to other posts in the blogosphere, and specifically to one by catherine rampell at the NY Times economix blog; this first graph, to the left simply shows the labor force participation rate by age group; you can see that teenager participation in red has been in a long decline since 2000 & before, falling most recently to near 33%; similarly, young adult participation in orange has been declining, but not as severely...but the participation rate of the over 55 contingent in purple started growing in the mid 1990s and continued to grow throughout the recession; holding at over 40% throughout; the chart to the right shows it's not just the old boomers who are working longer; all of the 5 year groupings of elderly are showing increasing participation, but especially those older than boomers, those 65-69 (purple) and 70 to 74 (teal)...and according to projections byBLS economist Mitra Toossi, graphed in that same post, participation rates for every age group over 55 are expected to accelerate even more over the next decade... next we're going to look at a chart from 'ironman' at political calculations, from part two of his 3 post series “Are Baby Boomers Stealing Jobs from the Young?”; but rather than those “not in the labor force”, he's showing the change in the civilian workforce (those who DO count) between november 2006 (chosen to capture the last year of expansion) and november 2011 (chosen to eliminate seasonality); here again we see increases in all the age groups over 50, greatest in the old boomers 60-64, the big decrease in teens & young adults in the civilian workforce, but even clearer is the picture that most of the decreases in the workforce in this recession are in the age groups 35-39, 40-44, & 45-49…so, without even asking why those who arent in the labor force have dropped out, it seems fairly clear just from these demographic charts that the decline in the labor force participation rate is not being caused by a sudden wave of early retirements; but on the other hand, with the long term trend of less participation by those younger than 25, there seems to be a strong likelihood that young people may be staying in school longer, and possibly borrowing to do so…but there is nothing yet to suggest a permanent change to the labor force participation rate or the employed to population ratios caused by changes in demographics; rather, we see that almost all of those not employed now are at an age where they'd be expected to be employed in the future...

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

Fannie Mae & Freddie Mac also reported delinquency rates for single family homes in march; as these loans met higher standards to be insured by these GSEs, their rates of failure are significantly les than the privately held loans (note that they are included in LPS industry totals); Fannie Mae reported a single-family serious delinquency rate in March of 3.67%, down from 3.82% in february; this is their lowest delinquency rate since April 2009; Freddie Mac reported its single-family serious delinquency rate at 3.51%, down from 3.57% in february and 3.63 a year ago, where the “serious delinquency” category for both GSEs is one where 3 or more home loan payments have been missed, and also includes those homes in foreclosure…

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

note on the graphs used here

in March a year ago the St Louis Fed, home to the FRED graphs, changed their graphs to an interactive format, which apparently necessitated eliminating some of the incompatible options which we had used in creating our static graphs before then...as a result, many of the FRED graphs we've included on this website previous to that date, all of which were all created and stored at the FRED site and which we'd always hyperlinked back there, were reformatted, which in many cases changed our bar graphs to line graphs, and some cases rendered them unreadable... however, you can still click the text links we've always used in referring to them to view versions of our graphs as interactive graphs on the FRED site, or in the case where an older graph has gone missing, click on the blank space where it had been in order to view it in the new format....